I can only agree with you having worked from home since the early 2000s (maybe you remember my office at home when you were with Bloomberg in Luxembourg). It fits well with businesses like ours where financial data et al. are immaterial or small ones focused on selling on internet. It is more difficult for activities where in situ interpersonal relationship is more important (journalism for example).
However, the time spent in endless and useless meetings where their organization or required presence has more to do with politics than business. Undoubtedly, working from home will increase productivity and reduce cost due to less space required at offices. As for retail, this should affect office prices.
Thank you for sharing your experience. I’ve always thought of commuting as the greatest waste of human productive capacity imaginable. Spending half an hour in the morning with my head in someone’s else armpit was never my idea of fun. If remote working becomes more acceptable, it will result in a significant loss of income for cities from corporate taxes and ancillary business income declining. That is an obvious risk in cities where property prices are at historic peaks.
Here is a section from an article from Bloomberg which makes some additional points:
If there's a loser here, it's the real estate and businesses whose value stems from proximity to the job centers in pricey metro areas. Dry cleaners, lunch spots and bars close to offices will suffer if there are fewer workers in the area. Prices for housing, particularly older, lower-quality housing, that's close to offices may decline as well. Commercial office valuations may also fall if companies reduce the amount of space they lease. Recessions and downturns are always a chance for companies and individuals to cut costs where they can. If remote work is as productive as in-office work, it gives companies the chance to save money on office space and possibly on labor (provided they will be able to pay workers less to live somewhere cheaper).
A large-scale adoption of this trend could both reduce geographic inequality and fuel economic growth. So many of the fruits of economic growth during the past generation have gone to knowledge workers in cities such as New York and San Francisco. But because the housing stock in both cities is relatively limited, much of the increase in wealth in those areas has gone to the owners of real estate. This has led to soaring rents for residents, negating the broad-based spillover effects that should have benefited the rest of the community from all that wealth creation.
But if higher-paid knowledge workers are able to move to places with lower housing costs, there will be money left over that isn't going to paying the rent or mortgage. It means more money can be spent on dining, travel, leisure and other labor-intensive local services. And it means that economic growth won't be as concentrated in coastal metros, spreading the wealth to the rest of the country. The growing concentration of wealth in coastal metros has seemed unsustainable for a while. Perhaps a shift in corporate culture that embraces work from home is just the catalyst we needed to break the pattern and bring about a more sustainable and equitable model of economic growth.Back to top